EARNINGS REVIEW
AMD, FY26 Q1 Earnings Results
Historical quarterly report · Results and outlook reflect information available at the time of that release. Actual results from later quarters have not been incorporated into the outlook.
Data Center became the main growth driver, with revenue exceeding the high end of guidance. Earnings improved year over year, but operating margin declined sequentially; check whether future product expansion translates into profitability.
Assessment · Data Center growth and FCF generation are positive. Revenue growth alone does not guarantee profitable product expansion. Next-quarter indicators to monitor are delivery against guidance, growth in Data Center earnings and supply-related cash requirements.
Key management and company statements
Earnings release · Excerpt from the original“Data Center now the primary driver of our revenue and earnings growth”Meaning · Data Center became a major driver of revenue and earnings growth.
Context · This is supported by EPYC demand and increased Instinct GPU shipments. Customer expectations that have not yet materialized are not added to revenue.
Original statement ↗01 Revenue, operating income and results versus expectations
Year over year · revenue 7.438 → 10.253 B$ (+37.8% · +2.815 B$), operating income 0.806 → 1.476 B$ (+83.1% · +0.670 B$).
Quarter over quarter · revenue 10.270 → 10.253 B$ (−0.2% · −0.017 B$), operating income 1.752 → 1.476 B$ (−15.8% · −0.276 B$), operating margin 17.1% → 14.4% (−2.7%p).
Data Center revenue grew by 2.101 B$ year over year, and segment operating income rose from 0.932 → 1.599 B$. Client and Gaming grew by 0.664 B$. Consolidated revenue was almost unchanged sequentially, but GAAP operating income declined due to factors including higher operating expenses.
Results versus previous guidance
Revenue guidance 9.500~10.100 B$ → actual 10.253 B$. 0.153 B$ above the high end.
02 Earnings sustainability · From operating income to net income
The difference between GAAP operating income of 1.476 B$ and non-GAAP operating income of 2.540 B$ includes stock-based compensation of 0.487 B$, amortization of acquired intangible assets of 0.551 B$ and other acquisition-related costs of 0.026 B$. Even noncash expenses require consideration of share dilution and acquisition economics.
Consolidated net income of 1.383 B$ includes discontinued-operations net income of 0.011 B$. The cash flow bridge begins with continuing-operations net income of 1.372 B$ for consistency.
- Operating income
- 1.476 B$
- Net non-operating income
- 0.128 B$
- Income tax expense
- −0.238 B$
- After-tax equity-method income/loss
- 0.006 B$
- Net income/loss from discontinued operations
- 0.011 B$
- Consolidated net income
- 1.383 B$
Net income of 1.383 B$ in the existing quarterly dataset is on a consolidated basis.
03 Cash flow quality · Net income → OCF → FCF
FCF was 2.566 B$, calculated by subtracting continuing-operations CapEx of 0.389 B$ from continuing-operations OCF of 2.955 B$. Its scope matches company FCF without mixing in discontinued-operations earnings or cash flows.
- Net income from continuing operations
- 1.372 B$
- Total net adjustments for noncash items, working capital and other items¹
- 1.583 B$
- Operating cash flow
- 2.955 B$
- Cash CapEx
- −0.389 B$
- FCF
- 2.566 B$
¹ Total net adjustments calculated as OCF−net income. This is not a single disclosed line item; it combines noncash items, working capital, classification differences and other adjustments.
FCF versus previous quarter · 2.082 → 2.566 B$, 0.484 B$ improvement.
04 Financial capacity · Net debt and payment obligations
Previous-quarter net cash · 2025-12-27
Cash and current investments 10.552 / Debt 3.222 B$
Current-quarter net cash · 2026-03-28
Cash and current investments 12.347 / Debt 3.224 B$
Net debt improved by 1.793 B$ from the previous quarter. The carrying amount of current debt is 0.874 B$. It may differ from the principal maturity schedule.
Cash and current investments exceed debt. However, low own-facility CapEx for a fabless company does not imply low cash needs or long-term purchase commitments for securing supply and developing products.
Common definition · Cash and current investments = cash equivalents + current investments and deposits. Debt = carrying amount of interest-bearing borrowings (current + noncurrent), excluding separately reported lease liabilities. This differs from total liabilities of 15.180 B$. Restricted cash, noncurrent securities and noncurrent deposits are excluded from cash and current investments.
05 Investment, capital allocation and cash returns
Customer plans for MI450 and Helios indicate growth potential but are not yet revenue recognized in the quarter. Track product deliveries, supply expansion and the resulting changes in gross margin and working capital together.
This quarter, cash CapEx/revenue is 3.8% and FCF/revenue is 25.0%. These ratios should not be used as a simple ranking of companies with different business models and FCF definitions.
06 Next-quarter and full-year outlook: implications
YoY +41.8%~+49.6% · QoQ +6.3%~+12.2%. Revenue comparison bases are 7.685 B$ for the year-earlier corresponding quarter and 10.253 B$ for this quarter. Growth rates are calculated from the original amounts.
The midpoint of next-quarter revenue guidance is 11.2 B$, and non-GAAP gross margin guidance is approximately 56%. This is not GAAP operating margin guidance and should not be compared directly with operating margin in this report.
RPO / Backlog
QoQ 0.315 → 0.264 B$ (−16.2% · −0.051 B$).
YoY 0.074 → 0.264 B$ (+256.8% · +0.190 B$).
RPO from development, engineering, IP and product contracts with original terms longer than 1 year. Excludes short-term product orders · Contract balances are not equivalent to confirmed next-quarter revenue or cash inflows. RPO scope differs across companies.
RPO disclosure ↗Quarterly results · CY-aligned presentation
Amounts in B$. Based on the CY-aligned year of this report, the table shows all 4 quarters of the preceding year and the current year to date. Each fiscal quarter is assigned to the CY quarter with the greatest overlap in actual reporting dates, alongside its original FY/CY quarter and start/end dates. Amounts have not been recalculated into actual calendar quarters.
| CY alignment | 2025 · 4 quarters | 2026 · 1 quarters | Change this quarter | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Metric | 2025 total4-quarter totalBalances are period-end | 1QFY25 Q124-12-29 ~25-03-29 | 2QFY25 Q225-03-30 ~25-06-28 | 3QFY25 Q325-06-29 ~25-09-27 | 4QFY25 Q425-09-28 ~25-12-27 | 2026 year to date1-quarter totalBalances are period-end | 1QFY26 Q125-12-28 ~26-03-28 | QoQvs FY25 Q4 | YoYvs FY25 Q1 |
| Revenue | 34.639 | 7.438 | 7.685 | 9.246 | 10.270 | 10.253 | 10.253 | −0.2%−0.017 B$ | +37.8%+2.815 B$ |
| Operating income | 3.694 | 0.806 | −0.134 | 1.270 | 1.752 | 1.476 | 1.476 | −15.8%−0.276 B$ | +83.1%+0.670 B$ |
| Operating margin | 10.7% | 10.8% | −1.7% | 13.7% | 17.1% | 14.4% | 14.4% | −2.7%p | +3.6%p |
| FCF | 5.519 | 0.727 | 1.180 | 1.530 | 2.082 | 2.566 | 2.566 | +0.484 B$ | +1.839 B$ |
| Operating cash flow | 6.493 | 0.939 | 1.462 | 1.788 | 2.304 | 2.955 | 2.955 | +28.3%+0.651 B$ | +214.7%+2.016 B$ |
| Cash CapEx | 0.974 | 0.212 | 0.282 | 0.258 | 0.222 | 0.389 | 0.389 | +75.2%+0.167 B$ | +83.5%+0.177 B$ |
| Net cash | 7.330 | 3.146 | 2.649 | 4.023 | 7.330 | 9.123 | 9.123 | +1.793 B$ | +5.977 B$ |
| Cash and current investments | 10.552 | 7.310 | 5.867 | 7.243 | 10.552 | 12.347 | 12.347 | +17.0%+1.795 B$ | +68.9%+5.037 B$ |
| Debt | 3.222 | 4.164 | 3.218 | 3.220 | 3.222 | 3.224 | 3.224 | +0.1%+0.002 B$ | −22.6%−0.940 B$ |
Indented rows are components or reference items for the parent metric. Net cash = cash and current investments − debt. Depending on the company definition, FCF may include additional adjustments such as lease principal and therefore differ from operating cash flow − cash CapEx. See the cash flow discussion for the detailed definition.
Annual totals and year-to-date totals appear before each year’s quarters. Revenue, earnings and cash flow are sums of quarterly figures; margin is total operating income ÷ total revenue; net cash, cash and debt are balances at the end of the last quarter. Do not treat totals covering different lengths of time as directly comparable annual figures.
Net cash = cash and current investments − debt. A negative figure indicates net debt. Changes in FCF and net cash are shown as absolute amounts in B$. Quarterly figures have not been adjusted to force reconciliation with disclosed annual totals.
AMD OCF, cash CapEx and FCF are consistently presented on a continuing-operations basis. Their scope differs from the existing dashboard’s OCF and total calculated FCF, which include discontinued operations.
Comparison bases, calculation methods and quarterly sources
Calculation and presentation · Amounts in B$. Figures disclosed in millions of US dollars are divided by 1,000 without altering the source values. Where only cumulative cash flows are available, the previous cumulative period within the same fiscal year is deducted. YoY, QoQ and margins are calculated using amounts before display rounding. Earnings changes from negative or 0 bases are expressed as profit/loss transitions and absolute amounts.
Opinions and outlook · Management quotations include original excerpts and their translations. Quotations not identified as earnings-call transcripts come from earnings releases. Interpretations and implications are the author’s judgments. No numerical probability of achieving a target is assigned without quantitative verification.